Tuesday, September 16, 2014

The malaise of corruption and influence-buying is deeply ingrained in the system

Activist and advocate Prashant Bhushan has rendered yeoman service by informing the Supreme Court of India about the goings-on at the residence of the Central Bureau ofInvestigation (CBI) director Ranjit Sinha. He added substance to his allegation that CBI’s Mr Sinha was going slow on various mega scam investigations by revealing the list of visitors to Mr Sinha’s home; and the list is truly startling.

Key functionaries of the Anil Ambani group allegedly met Mr Sinha 50 times in 15 months. The accused in every major scam under CBI’s investigation, includingcontroversial meat-exporter and alleged hawala-dealer Moin Akhtar Qureshi, have been frequenting Mr Sinha’s home; some even thrice a day. This is gross impropriety. The Supreme Court has issued a notice to Mr Sinha even as CBI tried to gag the media.

As an aside, we also discover the CBI chief’s maharaja-like lifestyle. The Economic Timessays he has seven cooks, 22 domestic helpers and a cobbler at his disposal, all paid by the exchequer. That the CBI director, who is lower than a joint secretary in the pecking order of government, can live like a king, tells you how our public funds are being misused.

The sordid episode throws light on the various investigating arms of the government. The CBI director has immense power over the lives and reputations of individuals, companies and institutions in India. He can initiate, or close, investigations at will; arrest people or destroy careers without accountability, to please political masters. The income-tax and enforcement departments and the department of revenue intelligence (DRI) are equally willing handmaidens when it comes to working on political instructions.

A slow judicial system with its propensity to remain silent about judicial corruption, as has been revealed by Justice Makrandey Katju on his blog, dissuades people from fighting back. The few, who do, often end up broken and frustrated by the system at every turn.

The misuse of government investigation agencies began almost immediately after independence but peaked under United Progressive Alliance (UPA) government. We saw a decade when unbridled corruption and mind-boggling scams were allowed to flourish in the name of ‘coalition dharma’.

The lay public may be shocked at reports about the CBI chief’s visitors, but many of us in the media have been helpless spectators of this gross corruption over the decades. Helpless because those who blithely give out details about corrupt people and practices will do nothing to stop it nor provide proof to allow publication.

• Consider some reactions that I have heard in the week that Mr Sinha was making news.

An IIM professor who conducted a training programme for senior income-tax officers was reportedly told by one attendee “some of us are losing Rs1 crore a day attending this programme.” We frequently hear from government insiders that top income-tax and police appointments, especially in Delhi and Mumbai, are auctioned. How do we prove it, when there are no whistleblowers?

• A senior RBI (Reserve Bank of India) official names a couple of bank chairmen who, he thought, were more likely candidates for CBI’s sting operation on Syndicate Bank and Bhushan Steel. He claims that one chairman was cautioned by RBI after reports about his corrupt ways escalated. He cannot say why no action was initiated against him, instead of issuing a mere word of caution. The rise in corruption at banks is in direct proportion to the ballooning of bad loans even as RBI remains a silent spectator.

• We have been hearing about a finance ministry bureaucrat who was exceedingly rude and humiliating to bank chairmen. Rampant corruption was also one of his qualities that has attracted the PM’s attention. Is the Central Vigilance Commission (CVC) only a bugbear for mid-career bureaucrats? Isn’t it curious that neither CVC nor CBI has such corrupt bureaucrats in its crosshairs?

• The Serious Frauds Office of the United Kingdom brought corruption charges against Alstom (UK) for allegedly paying a bribe of over three million euros to the Delhi Metro Rail officials in 2001 to secure a contract for a train control, signalling and telecommunications system. It reminds us of how the Securities & Exchange Board of India (SEBI) under CB Bhave wound up an investigation into the round-tripping of a massive $250 million into Reliance Communications with a consent order and no admission of guilt. Anil Ambani’s Reliance ADAG paid just Rs50 crore and managed a vague and opaque public disclosure without admission of guilt, even though the Financial Services Authority (FSA) of the UK issued a far more explicit order and also fined the UBS bankers $2 million.

Can we expect this to change? Prime minister Narendra Modi has made several clear commitments to the people of India. “We have to create systems where there is no injustice against anybody,” he tweeted. More specifically, he promised to act as a ‘chowkidar’ (guard) who would prevent the plunder of national wealth. “I will neither take a bribe not allow anyone else to accept one,” he has said.

We know this is easier said than done. Other than a rumour about the PM having actually asked the son of a senior leader to return a bribe, we have yet to see any change down the line, especially in regulatory and investigation agencies.

Conflict of interest often breeds corruption. The government is working on the Prevention of Corruption (Amendment) Bill, 2013, but who really believes it will make a difference? Then there is the lapsed private member’s Bill on conflict of interest introduced in the Rajya Sabha by Dr EMS Natchiappan.

A multi-disciplinary group of NGOs called the Alliance against Conflict of Interest (AACI) is working to resurrect and improve on it by putting together a detailed note with documented cases of how conflict breeds corruption and skews policy-making and regulation in diverse areas—from education to public health, food, safety, environment or finance.

Transparency International, a global NGO that tracks corruption, defines ‘conflict of interest’ as “any situation where an individual or an entity, whether a government, business, media outlet or civil society organisation, is confronted with choosing between the duties and demands of their position and their own private interests.”

In India, every position is influenced by corruption or nepotism and duty is never a consideration. This is at its worst when it comes to public servants and bureaucrats. While politicians face the ballot every five years, corrupt bureaucrats can damage the system for decades, especially when they are due to retire.

Even the most egregious cases of conflict, where retiring bureaucrats or chairmen of nationalised banks, insurance companies or regulatory bodies have immediately accepted lucrative advisory positions or board directorships with private and foreign companies, are rarely questioned. The mandatory cooling-off period is usually invoked only as an act of revenge rather than regular discipline.

The AACI points out how policies that decide people’s livelihoods and set standards for their food and health are set by advisory bodies/groups/committees that are riddled with conflict of interest. Powerful corporate influence is visible everywhere. This was legitimised over the past decade under the guise of public-private partnerships, such as the PHFI (Public Health Foundation of India), which also obtained huge tracts of land and funding from Union and state governments.

Conflict of interest is just as destructive when it works in a covert fashion, where powerful corporate and vested interests influence policy-makers to engage only with NGOs under their control and influence.

The consequence is bad law, unfair systems, more litigation and, in the worst case, public anger and protests. Suppressing any discussion on these issues in the mainstream media is another manifestation of the conflict-corruption nexus which is even harder to break.

Sucheta Dalal is the managing editor of Moneylife. She was awarded the Padma Shri in 2006 for her outstanding contribution to journalism. She can be reached atsucheta@moneylife.in

Sunday, September 14, 2014

Sorry for not posting here since along time. My grandson has fully occupied my mind and I did not feel like doing any thing. Since so many followers are missing, and flooded me with mails I thought I should continue, whatever may be the situation. With greetings